Earlier this week, Twitter’s shares dropped 10 percent as the company missed analyst expectations for their first quarter’s revenue. The social media platform still had year-over-year and user base growth, but they fell short of Wall Street speculation.
“Revenue came in at the low end of our guidance range because brand marketers did not increase spend as quickly as expected in the first quarter. We see a clear opportunity to increase our share of brand budgets over time,” the company said in their Q1 letter to shareholders.
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But, Twitter’s path to get back on a stronger business track could be in a recent deal that they signed with the NFL. Twitter won the rights to live stream 10 Thursday Night Football games this upcoming NFL season, and they paid a remarkably low price of $10 million for the whole package.
Jack Dorsey, CEO and co-founder of Twitter, let shareholders in on an interesting secret after Twitter announced their deal with the NFL, saying that “almost every league in the world contacted us.”
If Twitter could become the ultimate destination for fans of sports to catch live broadcasts, that would be a huge attraction for the growing population of consumers that do not have cable packages. It even seems like the social media platform is aiming for that end goal.
“For content producers and rights holders like the NFL, we offer the ability to reach a large global, mobile, and younger audience both on and off of Twitter, together with years of experience making money jointly with partners through our Amplify program. You should expect to see us working with other partners to bring these kinds of joint experiences to life on Twitter,” the company said in the section of their shareholder letter focused on live streaming.
This intense focus on live streaming is a natural fit for Twitter, and it is surprising that they are the first major social media platform to look into this type of deal.
The sheer amount of people that follow sporting events on social media is a first sign that a live broadcast will be successful. If Twitter is able to combine their already live social aspect with a full live stream, they could have a deadly tool in rising past analyst speculation. So, it should be interesting to see what Twitter truly means with their “plan to expand our global offering of live sports.”
But, they look to already be on the right track, and more deals with leagues around the world could mean a resurgence in share value and popularity if it can equal new revenue sources.